Pacific Basin Shipping cut its half-year underlying losses by 32 per cent to US$14.6 million from a year ago, thanks to stringent cost-cutting efforts that helped it mitigate an anaemic dry-commodities shipping market.
Hong Kong-listed Pacific Basin, the world's largest carrier of minor bulk cargo such as cement, bauxite and sugar, eked out US$5.8 million in net profit in the first half.
The company booked an unrealised derivative income of USD16.7 million mainly from an increase in average oil prices when compared to the end of 2014, which affected its bunker fuel swap contracts. Revenue fell 30% year on year to USD634.6 million.
Mats Berglund, CEO of Pacific Basin, said dry bulk market rates for the first half of 2015 had been undermined by reduced Chinese demand and an oversupply of vessels.
He attributed his company's profit and positive EBITDA to "a significant turnaround in our Handymax performance, our intensified efforts to reduce costs, and Handysize and Handymax earnings that outperformed spot market rates by 60 percent and 49 percent respectively."
At mid-year, Pacific Basin operated 197 dry bulk carriers, of which 81 were self-owned.The company has also reduced its chartered-in fleet by 13 since the end of March.
"We are operating more owned vessels and redelivering expiring medium and long-term chartered ships to further reduce our daily vessel costs while enabling greater control and service quality," Pacific Basin commented.
In addition, a total of 17 self-owned and eight chartered newbuildings will join the core fleet over the next two years, the company said. The newbuildings on order have also decreased from late March, when Pacific Basin said it had 18 self-owned newbuildings and 10 chartered newbuildings on order.